Lib Dems to force vote on creating new customs union with EU

The Liberal Democrats are forcing a vote in parliament on creating a new customs union to put pressure on Labour MPs to take a more pro-EU stance. Ed Davey’s party is writing to all Labour MPs urging them to back a new bill in favour of a customs union with the EU, believing this is the best way to boost growth and raise revenue, rather than tax rises. The bill, tabled by Al Pinkerton, the Lib Dem spokesperson on Europe, will be voted on by MPs in early December, two weeks after the budget. It is largely symbolic and not likely to pass because it does not have government support. However, the Lib Dems are hoping to demonstrate support among pro-EU MPs for the idea of a new customs union. The letter highlights recent analysis from the National Bureau of Economic Research which found that Brexit has reduced UK GDP by 6-8%. Separate analysis by the House of Commons Library commissioned by the Lib Dems has found that the boost to growth from a more ambitious trade deal with the EU could generate at least £25bn a year for the public finances. The Lib Dems said they were calling for the UK to negotiate a new customs union with the EU, covering most goods but not agriculture, and in which the UK would be consulted during negotiations on new EU trade deals with third countries. Davey said: “The chancellor has admitted the damage Brexit has done to our economy, including burying British businesses in mountains of red tape, yet the government is refusing to take the steps needed to fix it. “A customs union with the EU is the single biggest lever this government could pull to turbocharge the UK economy. “We will work with MPs across parliament who want a closer trading relationship with Europe – to cut red tape, boost growth, and properly fund our public services.” Related: EU confirms it wants UK to pay into its budget in exchange for closer ties The Lib Dem plans propose a bespoke customs union with the EU by 2030, suggesting it could be similar to the one it has had with Turkey since 1995. The party would want it to supplement and improve the existing trade deal and cooperation deal with the EU, rather than totally supplanting it. Keir Starmer’s government has repeatedly said it does not want to join a customs union with the EU, saying it was a red line. It is negotiating closer ties with the EU but the bloc has signalled it would want the UK to pay into the EU budget in return for future participation in the European single market, such as in electricity. During a landmark summit in May that launched the government’s EU reset, Starmer and the commission president, Ursula von der Leyen, agreed the two sides “should explore in detail the necessary parameters for the United Kingdom’s possible participation in the European Union’s internal electricity market”. The two sides are also deadlocked over the EU’s demand for an entry fee of up to €6bn (£5.3bn) to allow British companies to maximise benefits from a €150bn (£132.1bn) EU defence programme.